Receive the latest business updates in your inbox

A new Columbia Business School study titled, “People with Power are Better Liars,” finds that there is truth to the saying "power corrupts."

New York Gov. David Paterson is embroiled in a scandal over whether he used his power and influence to intimidate a woman pursuing a domestic violence case against one of his top aides.

As a result, the governor said last month that he would not seek a second term, and his communications director quit earlier this month citing “integrity” issues.

Former Enron CEO Jeffrey Skilling, who went to prison after the spectacular collapse of the company, is appealing to the Supreme Court his 2006 conviction on 19 counts of fraud, conspiracy, insider trading and lying.

His lawyers argue that he didn’t get a fair trial and that Skilling’s conduct, “even if wrongful in some way,” was not illegal because he was not looking out for his personal interests “apart from his normal compensation incentives.”

The issue of integrity is at the heart of the predicaments these powerful men find themselves in. An organization’s health often hinges on the trustworthiness of its leaders, ethics experts say.

There’s old saying: power corrupts. And a new Columbia Business School study titled, “People with Power are Better Liars,” finds there may be some truth behind the cliché.

“People in power are able to lie better,” said Dana Carney, a management professor at Columbia Business School and one of the co-authors of the study. “It just doesn’t hurt them as much to do it.”

The effects of lyingFor the average liar, she said, the act of lying elicits negative emotions, physiological stress and the fear of getting caught in a lie. As a result, she added, liars will often send out cues that they are lying by doing things like fidgeting in a chair or changing the rate of their speech.

But for the powerful, the impact is very different, according to the study:

“Power, it seems, enhances the same emotional, cognitive, and physiological systems that lie-telling depletes. People with power enjoy positive emotions, increases in cognitive function, and physiological resilience such as lower levels of the stress hormone cortisol. Thus, holding power over others might make it easier for people to tell lies.”

Carney and the other researchers, Andy Yap, Brian Lucas and Pranjal Mehta, used volunteers who were told they were either leaders or subordinates. The leaders were given a large office, and the subordinates given a small windowless space.

The subjects were asked to find $100 that was hidden nearby.

Half of the volunteers were instructed by a computer to steal the $100. The other half were instructed to put the money back (participants were assured — and believed — that the experimenter did not know whether they were assigned to steal or not steal).

All individuals were instructed to convince the experimenter that they did not take the money. If the individual could successfully convince the experimenter (regardless of whether they were lying), they could keep the $100 in cash.

All participants were then interviewed about whether they had stolen the money: half were lying and half were telling the truth. The interviewer (blind to experimental condition) asked all participants the same critical questions, for example: “Did you steal the $100?” and “Why should I believe you?”

The interviews were taped so the researchers could see if they exhibited any classic nonverbal lying cues. After the interviews were completed, the subjects were tested to gauge their emotional feelings and cognitive impairment. Saliva samples were taken to measure stress hormone levels.

The result:

“Low-power individuals showed the expected emotional, cognitive, physiological, and behavioral signs of deception; in contrast, powerful people demonstrated no evidence of lying across emotion, cognition, physiology, or behavior,” the study found. “In other words, power acted as a buffer allowing the powerful to lie significantly more easily ... and more effectively. Only low-power individuals felt badly after lying.”

Dishonesty and power
How does this all translate into the real world? Carney said the research doesn’t show that power leads to lying, but it does suggest dishonesty comes easier to those in power.

David Childers, the CEO of EthicsPoint, a compliance company that offers more than 2,000 businesses a hotline where employees can report business issues such as integrity lapses, said he has seen a propensity by some leaders to lie.

“From my perspective and experience, the better a person can do at concealing their true motivation, the better they do climbing the corporate ladder, and the better they do in abuse and misappropriation of assets in an organization,” he said. “We see a high percentage of our reports where management is involved or implicated.”

The drive for fast money in the stock market may also contribute to dishonesty. Childers said there is a great deal of pressure on leaders of organizations to perform today because investors are looking for big returns fast and are not in it for the long haul. Executives who are ethical but don’t show big quarterly results are not rewarded, he said.

Such realties can be disheartening, but Columbia’s Carney believes her research offers organizations a reality check that can help keep leaders on the honesty path.

“We know that high-powered people do crazy, bad stuff,” she said. “I think reminding a person that the behavior is bad can get them to stop engaging in those transgressions.”

She suggested that ongoing discussions about ethics and integrity can help throw some cold water on fibbing bosses.

It also should be the job of the board of directors to stop lying executives, but often they do nothing unless they’re faced with significant lawsuits and the need to protect themselves, said Peter Cohan, a management consultant and author of “Value Leadership: The 7 Principles that Drive Corporate Value in Any Economy.”

A lying cultureFor underlings, dealing with a deceitful boss can be like a high-wire act.

A leader who lies is able to get subordinates to help him or her to lie, Cohan said. “A lot of leaders have a certain outcome they want to see, and if people around them make that happen, they get promoted. If people say, ‘That’s not going to work,” those people get fired. It creates a bubble around them.”

Mary Gentile, director of the “Giving Voice To Values” curriculum and senior research scholar at Babson College, said employees aren’t powerless.

“Some situations warrant going over the boss's head, but sometimes you can influence their behavior by simply letting it be known what you know and understand about the issue at hand, in a non-accusatory way,” she said, “so that the boss realizes that they cannot fly under the radar with this deceit.”

The key may be expecting more from our leaders.

That’s the mission behind the “MBA Oath” movement that started with a group of Harvard Business School students in 2009 who took a pledge to be ethical and think about the greater good when they went out into the real world.

“We want it to be more than just words on a page,” said Peter Escher, who helped found the MBA Oath nonprofit and has co-authored “The MBA Oath” book due out in April. “We hope our organization becomes a platform for discussion of ethical issues before they arise.”

The group gives signers of the oath an MBA Oath card to carry in their wallets. “It may not keep someone accountable, but it’s a small step, a reminder of the commitment you made,” Escher said.